With Rent Or Mortgage Arrears, Early Advice Is Vital
Castlemilk Law & Money Advice Centre continues to offer advice on mortgage, rent arrears and homelessness across our offices in Castlemilk, Toryglen and the Gorbals. A new, comprehensive housing leaflet sets out these services.
Tenants and homeowners alike continue to suffer financial hardship caused by Covid-19, which can lead to threats of eviction or home repossession. Growing numbers claimed Universal Credit (UC) with the five weeks wait period for a first pay-out causing difficulties. Whilst the £20 per week Universal Credit uplift during the pandemic was widely welcomed, its planned withdrawal on 6 October 2021 will hit many. The ending of the Coronavirus Job Retention Scheme on 30 September 2021 threatens further employment and debt problems.
For those who rent, the latest Scottish Housing Federation’s Universal Credit Survey of the social housing sector shows that while emergency funds have been made available to support tenants during the pandemic, there are serious concerns about mounting financial pressures. 27% to 28% of social tenants were estimated to be in receipt of UC April to June 2021. Of those, around an estimated 45% were in rent arrears. This compares to 24% to 38% of non-UC tenants in arrears. The average arrears for those on UC is estimated at £590, while those not in receipt of arrears were £340. The potential impact of removing the £20 per week UC uplift and the ending of the Job Retention Scheme may make this situation worse.
For those in mortgage arrears, whilst payment deferrals brought under Covid have ended, lenders should still be offering tailored advice to those in arears. This can include discussions around part payment plans, mortgage term extensions, temporary transfer to an interest only mortgage, deferral of interest due or the addition of what is due to the total mortgage balance (called capitalising). Lenders must discuss the options available dependant on the borrower’s circumstances. Homeowners may be eligible for other government support such as the DWP Support for Mortgage Interest Scheme, the Mortgage to Rent Scheme or the Mortgage to Shared Equity Scheme. Here at the law centre, we can offer help with these. The continuing advice though is to make payments to your mortgage if you can, as this will reduce the amounts owed in the long term. In any case, do not cancel your direct debit without speaking to your lender or taking advice as this will count as a missed payment and effect your credit rating.
For those in difficulties, as ever, the best advice is to stay in touch with your landlord or lender and take advice from a benefits advisor and/or solicitor to try and address the arrears as early intervention can make a difference. Here at the law centre, we offer benefits advice, help with applications and appeals, help to get your digitally connected and legal representation when needed.
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THE NEW TENANT GRANT HARDSHIP FUND
The Scottish Government is making £10m available to tenants and landlords in the private and social sectors to help clear rent arrears. The Tenant Grant Hardship Fund is aimed at supporting people directly affected financially by the Covid 19 pandemic. It covers the period between March 2020 and 9 August 2021. Grants don’t need repaid and will cover up to 12 months’ rent. The Scheme is open until the end of March 2022.